Target Corporation Final
Target Corporation
Case
Finance 3504
Dr. Casper
By:
Hyeji Jane Lee
Wajiha Yassin
Shawn Salvia
Executive Summary
In 1962, the first Target store was opened by its parent company, The Dayton Company, officially becoming the ‘Target Corporation’ during year 2000. In the following five years, Target’s sales saw a major increase raising their revenue to $52.6 billion. With 1400 locations throughout the nation, Doug Scovanner, the CEO, has to decide the next steps Target must take for continual growth. He was presented ten different investment options, which, he narrowed down to five with a total capital expenditure equaling $200 million. Upon analyzing the five locations, Scovanner has decided to suggest three locations, The Barn, Gopher Place, and Remodeling of the Stadium to the Capital Expenditure Committee (CEC). The Barn promised the highest NPV compared to its low investment cost, and holds the highest NPV even at the worst-case scenario. The Gopher place also offered a high NPV with a low investment cost with the second highest NPV at worst-case scenario. The Stadium Remodel yielded the highest NPV to Investment ratio while having the highest median income market with the highest percentage of college graduates. These three combined show the greatest return for the investments. In comparison, the other two locations, Whalen Court and Goldie’s Square, had a high initial investment cost with risky returns. Scovanner further explained how these three options would greatly diversify Target’s portfolio and lower its risk while maximizing its growth in this Target Corporation Analysis.
Introduction
Target is a strong preforming company with about 1,400 stores across the country. It carries merchandising assortments ranging from food and commodities to electronics, toys and sporting goods. Target is a strong preforming company with about 1,400 stores across the country. Target carries merchandising assortments ranging from food and commodities, to
Case
Finance 3504
Dr. Casper
By:
Hyeji Jane Lee
Wajiha Yassin
Shawn Salvia
Executive Summary
In 1962, the first Target store was opened by its parent company, The Dayton Company, officially becoming the ‘Target Corporation’ during year 2000. In the following five years, Target’s sales saw a major increase raising their revenue to $52.6 billion. With 1400 locations throughout the nation, Doug Scovanner, the CEO, has to decide the next steps Target must take for continual growth. He was presented ten different investment options, which, he narrowed down to five with a total capital expenditure equaling $200 million. Upon analyzing the five locations, Scovanner has decided to suggest three locations, The Barn, Gopher Place, and Remodeling of the Stadium to the Capital Expenditure Committee (CEC). The Barn promised the highest NPV compared to its low investment cost, and holds the highest NPV even at the worst-case scenario. The Gopher place also offered a high NPV with a low investment cost with the second highest NPV at worst-case scenario. The Stadium Remodel yielded the highest NPV to Investment ratio while having the highest median income market with the highest percentage of college graduates. These three combined show the greatest return for the investments. In comparison, the other two locations, Whalen Court and Goldie’s Square, had a high initial investment cost with risky returns. Scovanner further explained how these three options would greatly diversify Target’s portfolio and lower its risk while maximizing its growth in this Target Corporation Analysis.
Introduction
Target is a strong preforming company with about 1,400 stores across the country. It carries merchandising assortments ranging from food and commodities to electronics, toys and sporting goods. Target is a strong preforming company with about 1,400 stores across the country. Target carries merchandising assortments ranging from food and commodities, to